Bond Prices Fall on War Fears

Published
7:00 pm EST, Sunday, January 26, 2003

Bond prices fell on Monday along with stocks as investors remained nervous about a possible war with Iraq.

The price of the benchmark 10-year Treasury note slipped 9/32 point, or $2.81 per $1,000 in face value. Its yield, which moves in the opposite direction, rose to 3.96 percent from 3.93 percent on Friday.

The 30-year Treasury bond dipped 11/32 point to yield 4.88 percent, up from 4.86 percent Friday, according to Moneyline Telerate.

Yields on one-month Treasury bills rose to 1.15 percent as the discount rose 0.01 percentage point to 1.13 percent. Yields on three-month Treasury bills rose to 1.16 percent as the discount rose 0.01 percent to 1.14 percent. Six-month yields rose to 1.18 as the discount was unchanged at 1.16 percent.

Yields are the interest bonds pay by maturity, while the discount is the interest at which they are sold.

The federal funds rate, the interest on overnight loans between banks, rose to 1.31 from 1.19 percent.

In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds fell 3/32 to 108 3/4. The average yield to maturity was 5.01 percent, down from 5.09 percent on Friday.